I dissent to the view of the majority as expressed in the opinion of this court speaking through the Honorable Vice Chief Justice Branson.
The syllabus of the majority opinion reads, in part, as follows:
"An instruction which is intended to go to the law of the case, which indicates to the jury that it might find for the plaintiff on the doctrine of innocent purchaser for value without notice, whereas same was never pleaded, and there was no evidence before the jury which as a matter of law would give plaintiff the benefit of such doctrine, a verdict based thereon must be set aside." *Page 291
I dissent for two reasons. First, that in my judgment the rule as stated in the syllabus requiring an "affirmative defense" or pleading of innocent purchase for value without notice as applied to this, an action in replevin, is fundamentally wrong and contrary to the settled law of this state and in conflict with numerous opinions of this court.
This is an action in replevin brought by the Union Company. There was a general denial by the Mutual Company. A general denial is all that is necessary to admit of any defense that the defendant might have. A plaintiff in a replevin action is not bound to disclose any source of title in his pleadings when (see reference hereafter) his ownership is general and not special.
In Robinson Co. v. Stiner, 26 Okla. 272, 109 P. 238, the rule is adopted that:
"All that a plaintiff in replevin is required to set forth in his petition is that he is the owner of the property in controversy (describing it), or that he has a special ownership or interest therein (stating the facts in relation thereto), that he is entitled to the immediate possession of the property, and that the defendant wrongfully detains the same from him."
The early case of Broyles v. McInteer, 29 Okla. 767,120 P. 283, lays down the rule of this court, that:
"Under general denial in replevin, the defendant may make any defense which will defeat plaintiff's claim or right to possession as against the defendant, and under the code great liberality is allowed such defenses." Stone v. American Nat. Bk., 34 Okla. 789, 127 P. 393; Jones v. Bostick,35 Okla. 364, 129 P. 718.
In Francis, Sheriff, et al. v. Guaranty State Bank of Texola,44 Okla. 446, 145 P. 324, this court, in paragraph 2 of the syllabus, stated the rule to be as follows:
"An answer containing a general denial, in a replevin proceeding, puts in issue the title and right of possession of the plaintiff, and under such answer the defendant may prove title or right of possession either in himself or a stranger,or make such defense as will defeat the plaintiff's claim orright to possession as against the defendant."
In the case of Thompson v. Grove, 72 Okla. 290, 180 P. 553, this court, speaking through Mr. Justice Kane, and with a unanimous opinion save and except Justice McNeill, not participating, adopted the rule laid down in Broyles v. McInteer, supra, and repeated the same in paragraph 4 of the syllabus therein.
In Williams v. Gibson Bros., 60 Okla. 147, 159 P. 649, this court says:
"It is well settled that under a general denial in a replevin action, a defendant may interpose any defense which will defeat the plaintiff's claim." Payne v. McCormick Harv. Co.,11 Okla. 318, 66 P. 287; Bancroft-Whitney Co. v. Mayfield,36 Okla. 535, 129 P. 702; Holtom v. Nichols Shepard Co.,64 Okla. 184, 166 P. 745.
But in the case at bar the matter of an affirmative defense of innocent purchaser for value was not presented. The Union Company, as plaintiff, was the party who sought to prove its innocent purchase. It (the Union Company) alleged it was the owner of the property and was entitled to immediate possession, demand, etc. The Mutual Company denied generally. The Union Company sought to prove its ownership by showing expenditure of funds to McMahon for the pipe. The Mutual Company did not try the case below on the theory that there had been no actual payment of purchase price nor did it present such a theory on appeal in its assignments of error.
So far as contained in their brief, defendant makes no objection to the introduction of the evidence of plaintiff which tended to show their status of innocent purchaser. In fact, on page 46 of plaintiff in error's brief is contained this statement:
"In any replevin action, the subject of inquiry is the right of possession to the property, and, while it is the rule that any evidence is admissible which properly determines the ownership or right of possession of the property, this rule of evidence does not permit the admission of communications had between the principal and his agent in the absence of the party against whom it is offered."
Therefore, there being no objection to the introduction of evidence bearing upon the innocent purchaser phase, under the rule of this court, pleading will be considered as having been amended to conform to the facts proven without objections. This, under the concession for the sake of argument only that the status of innocent purchaser for value must be pleaded in a replevin case.
In Jones v. McQueen (Utah) 45 P. 202, it is said:
"As a general rule, where a party to an action relies upon fraud he must plead it. In replevin, however, the law seems to be settled, in most jurisdictions, that where the plaintiff alleges ownership generally, and right of possession, without disclosing origin of title, or stating facts showing it, the defendant *Page 292 may traverse the allegations of the complaint, and, under the issue thus formed, may prove that the plaintiff's title was founded in fraud, and introduce any evidence which tends to show that the plaintiff had neither title in the property, nor right of possession thereof. This rule is doubtless based on the fact that in replevin the plaintiff is not bound to disclose any source of title, and therefore the defendant is not bound to anticipate the source of title under which the plaintiff may claim. Cobbey, Repl. sec. 752; Abb. Tr. Brief Pl. secs. 942, 958; Stephens w Halstead, 58 Cal. 193; Bailey v. Swain, 45 Ohio St. 657, 16 N.E. 370; Schulenberg v. Harriman, 21 Wall. 44; Steel Works v. Bresnahan, 66 Mich. 489, 33 N.W. 834; Merrill v. Wedgwood, 25 Neb. 283, 41 N.W. 149; Swope v. Paul (Ind. App.) 31 N.E. 42; Graham v. Warner's Ex'rs, 3 Dana, 146; Mather v. Hutchinson, 25 Wis. 27; Mullen v. Noonan (Minn.), 47 N.W. 164; Delaney v. Canning, 52 Wis. 266, 8 N.W. 897."
The second reason for my dissent is as to that portion of the syllabus which says: "and there was no evidence before the jury which as a matter of law would give plaintiff the benefit of such doctrine. * * *"
I think it will be conceded that there was evidence tending to show that McMahon received the pipe (the personal property involved) under a conditional sales contract. It is stated in the majority opinion that "as a matter of law" McMahon had possession of this pipe as a bailee with a mere option to purchase, the terms not being agreed upon by the parties." But to constitute a conditional delivery it is not necessary that the vendor should declare the condition in express terms at the time of delivery. It is sufficient if the terms can be inferred by the acts of the parties and the circumstances of the case. McManus v. Walters, 62 Kan. 121, 6l Pac. 686; Words Phrases, vol. 2, p. 1408. If the identical thing, either in its original or an altered form, is to be returned, it is a bailment. Union Stockyards Transit Co. v. Land Cattle Company, 59 Fed. 49. No such return was provided for herein, but it clearly appears on condition of payment by oil runs the title was to pass to McMahon.
It is, I take it, the majority view that such fact as a matter of law would not admit or give benefit of such a doctrine. And why not?
Mr. Williams, president of the Mutual Company, testified (R. p. 70) as follows:
"Q. Did you have any arrangement with Mr. McMahon?
"A. Yes, the pipe was to be — the pipe was unloaded at Grandfield, Okla.; part of it was on the property of the Southern Oil Corporation, and when he was ready to lay the line, this pipe was to be used in the line. We were to furnish the pipe; all of the work and everything, the labor was to be furnished by him.
"Q. You may state so as to inform us, what Mr. McMahon was to do with that pipe, or was going to do with the pipe?
"A. We needed oil for a refinery at Chanute, Kan. Mr. McMahon had some production, or was drilling wells on his lease, and wanted to sell us the oil. First he agreed he was going to lay the pipe line for his production at Grandfield, Okla., but he was unable to finance the pipe, and pay for the same. I agreed then to purchase the pipe for the laying of the line, and he was to pay for the pipe out of the oil from his lease. The pipe was never laid. The fact is a receiver in a dispute between Oklahoma and Texas came in and took his production or possession of his property." (R. p. 72)
"Q. Now, if I understand you, you had purchased this pipe and you were to furnish it to McMahon; McMahon was to furnish the labor for the laying of that pipe, and there was sufficient pipe furnished by you to lay a pipe line of some six to eight miles in length, is that correct?
"A. Six to seven miles."
E. C. Barkley, witness and employee for the Mutual Company, testified:
"Q. What was your understanding or agreement with McMahon at the time the pipe was purchased?
"A. Why we were to furnish this 4-inch pipe to go in the McMahon pipe line with the understanding that at such time as he furnished us sufficient oil in our tank cars in Grandfield from this pipe line to pay for this pipe we would then negotiate a contract with him for the sale to him of the pipe." (R. p. 92) * * *
"Q. How much was he to pay you for this pipe?
"A. We didn't have any agreement about the price of the pipe to him."
By the evidence thus far set out the defendant, Mutual Company, strongly contended for the bailee theory; however, there was evidence more strongly indicating that in fact the relation of McMahon with the said defendant, Mutual Company, was that of conditional vendee. Such evidence is as follows (Mr. Williams, president of the defendant, Mutual Company, and Mr. McMullen, prior to the trial of the case at bar, had testified by deposition taken in another case concerning the property involved in this action [R. p. 138]): *Page 293
"Q. Under what arrangement with the McMahon Construction Company was this pipe line to be delivered to it? With whom did you make the arrangement, if any?
"A. With J. D. McMahon.
"Q. You may state that arrangement.
"A. We were in need of crude here for a refinery at Chanute, Kan. Mr. McMahon came to us to sell us oil, and if he could make a deal for us to purchase oil from him, he would lay a pipe line from Grandfield, Okla., and deliver the oil to us in tank cars at that point. We were to take the oil from the line and he was to build this line, which was delayed a considerable length of time, and then later we learned that he was unable to finance the line. We agreed to purchase the pipe for the pipe line which the McMahon Construction Company was to build. Our pipe was to be used in the line, the title of which was to remain in Mutual Oil Company.
"Q. Did this pipe or the pipe which you purchased for the Mutual Oil Company, was that in the possession of Mr. McMahon or his company?
"A. It was given to him or delivered to him for the purpose of being in a line with the understanding that the title to the pipe was to remain in the Mutual Oil Company until paid for.
"Q. Where was it delivered to him?
"A. At Grandfield, Okla., and Devol, Okla.
"Q. What interest, if any, did the Mutual Oil Company have in this pipe line?
"A. None whatever, except furnishing the pipe for the laying of the line for the purpose of getting oil for the refinery.
"Q. Was there any agreement between the Mutual Oil Company and Mr. McMahon that it should assist him in the building of the pipe line?
"A. None except furnish the pipe. * * *
"Q. Which you have stated was to be paid for in oil?
"A. Out of oil."
McMullen testified as follows:
"Q. Whenever he ran sufficient oil through the pipe line it was his absolutely, wasn't it?
"A. McMahon's, yes. That was my understanding of what agreement was at Wichita Falls.
"Q. That was what Mr. Barkley told you when you first came down here?
"A. That was my understanding from Mr. Barkley.
"Q. And he was to pay for it by oil?
"A. That was what Mr. Barkley told me; yes, sir."
I have heretofore set out the evidence of the defendant, Mutual Company, most strongly tending to show that McMahon acted as bailee in receiving the pipe, as well as the testimony of the Union Company which most strongly tends to show that McMahon was conditional vendee of the property. These two theories were submitted to the jury, and I think properly so under instruction No. 3. The jury elected to believe and act upon a conditional vendee theory, and there being evidence to support this theory, under the long standing rule of this court, the verdict should not be disturbed on appeal.
As I view the facts, McMahon was not agent of the Union Company in transferring the pipe from the Mutual Company. I think there is some merit in the contention that McMahon was an independent contractor in building the Union Refining Company's refining plant, but, be that as it may, in acquiring possession of the pipe in controversy McMahon contracted solely with the defendant, Mutual Company, and not with the Union Company in securing this pipe; therefore, in making the contract to build the pipe line it cannot with reason be said that then McMahon represented the Union Company, but for the sake of argument, conceding that in building the Union Refining Company's plant McMahon was an agent and not an independent contractor, notice to the agent could not and should not be imputed to his, McMahon's, principal in this instance as applied to McMahon's conversion of the pipe, for the reason that here is presented an occasion of an agent acting adversely to the interest of his principal, and this presents the exception to the general rule as stated in Clark Skyles on Agency, section 485, as follows:
"The doctrine that a principal is chargeable with notice of facts known to his agent is based, not only upon the fiction of identity, but also upon the fact that it is the duty of the agent to communicate his knowledge to his principal, and the presumption that he has performed this duty. No such presumption can arise, however, where the agent is dealing with the principal in his own interest and where he is acting in collusion to defraud his principal, or where for any other reason his interest is adverse to that of his principal, so that it is to his own interest not to communicate the knowledge to the principal. In such case the general rule that notice to an agent is notice to his principal does not apply."
Then, by reason of section 8851, Complied Oklahoma Statutes, 1921, the conditional sales contract not being recorded, the same *Page 294 was void as against an innocent purchaser for value.
In Morgan, Baldwin Co. v. Kanola Oil Refg. Co.,102 Okla. 26, 226 P. 335, this court adopted the rule in the following words:
"A principal is not chargeable with knowledge of his agent gained in the performance of acts not done on behalf of his principal, but for and on his own personal behalf, and in matters where the agent's interest is adverse to that of his principal."
I am, therefore of the opinion that there was evidence before the jury which as a matter of law gave plaintiff the benefit of the doctrine of innocent purchaser for value without notice, and I am of the opinion that the verdict of the jury based upon such a doctrine, under the facts as related here, should be affirmed.